Most major utilities have sought to raise their electricity rates by around 30 percent to over 40 percent for the next fiscal year, in a move that will likely add to the burden on households expenses.
Seven of the 10 largest electricity companies have applied to the industry ministry to raise regulated electricity rates for households, which requires government approval.
Of the 10 companies, nine expect a net loss for the current fiscal year to March due to increases in the price of gas and coal needed for thermal power plants.
As a relief step, the government will start providing subsidies to power companies so they can lower household electricity bills for January through to the summer by about 20 percent.
However, the requested price hikes could be more than the subsidies, dealing another blow to consumers, who have been hit by price increases for an increasing number of goods as a result of Russia's war in Ukraine.
Hokkaido Electric Power Co. said Thursday that it has requested an average hike of 32.17 percent in June, which will increase the monthly bill for an average household by 2,838 yen ($22).
Hokuriku Electric Power Co. in November last year requested the highest rate of increase at 45.84 percent, while Shikoku Electric Power Co. asked for the lowest at 28.08 percent.
Among the seven utilities, five are looking to raise their rates in April when their new business year starts and two others aim to do so in June.
Large utilities offer two types of household electricity rates -- a "regulated rate" and a "free rate" that the firms can set at their own discretion following the liberalization of the retail market in April 2016.
The ministry will assess whether the company has taken cost-cutting measures to justify the requested rate increase.
Following the 2011 Fukushima nuclear disaster, which was triggered by a powerful earthquake and tsunami, a number of nuclear power plants remain offline while they seek to meet stricter safety regulations.
The government intends to speed up efforts to restart nuclear reactors that have passed the new rules in a policy shift to utilize nuclear power as much as it can.
